The FY 2018 omnibus bill will be hogging the spotlight this week, as lawmakers scramble to avoid a government shutdown. The deadline is March 23, and the bill text is still baking. The House GOP caucus is meeting this afternoon to go over the bill with members. As always with these big spending measures, the House Freedom Caucus is expected to oppose the trillion-dollar-plus legislation. This means the GOP leadership will have to reach across the aisle for votes.

Here’s what else is in store for the week:

House

Floor Votes. The chamber will take up the following financial services bills:

H.R. 4061 – the Financial Stability Oversight Council Improvement Act would change the systemically important financial institutions (SIFI) designation process by increasing the frequency of studies, reviews, and meetings that must be completed before the council designate a nonbank as a SIFI.

Banking Bill Drama. Last week, the Senate passed its regulatory relief bill for community banks (S. 2155) in a bipartisan fashion. However, House Financial Services Committee Chairman Jeb Hensarling said that the House would not accept the bill as written. He wants to amend the bill by adding some more House-passed provisions. The Senate Democrats who supported the measure are opposed to changing the bill further, essentially telling Hensarling to take it or leave it. It remains to be seen which side will win this battle.

Trade Hearings. The House Ways and Means Committee will have hearings on Wednesday and Thursday to discuss trade issues (specifically tariffs) with U.S. Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross.

Senate

Trafficking Bill. The chamber will vote to kick off debate on H.R. 1865 – an anti-sex trafficking measure that would allow states and victims to fight online trafficking by establishing new and enhanced penalties.

Nomination. At 5:30 p.m., members will vote on the nomination of Kevin McAleenan to be the commissioner of U.S. Protection at the Department of Homeland Security.

Trade Hearing. USTR Lighthizer will drop by the Senate Finance Committee on Thursday to talk about the president’s trade agenda and tariffs.

Key Hearings

Tuesday, 3/20

House Appropriations Committee. Subcommittee hearing on the FY 2019 Department Housing and Urban Development budget.

The House Ways and Means Tax Policy Subcommittee held a hearing on March 14 to review the recently expired tax provisions (so-called “tax-extenders”). The McGuireWoods Tax Policy Group’s hearing summary is available here if you’re interested in reading the highlights.

The House Transportation and Infrastructure Committee held hearings last week on funding options for the administration’s $1.5 trillion infrastructure investment plan. It didn’t take long for the gas tax issue to move into the spotlight.

Transportation Secretary Elaine Chao told lawmakers that no decisions have been made on how to pay for the proposal. She added that all funding options, including a gas tax increase, are on the table. Ranking Member Peter DeFazio (D-OR) criticized the lack of progress on identifying pay-fors.

Both DeFazio and Chairman Bill Shuster (R-PA) called on the president to engage more on infrastructure and resolve the funding question since states cannot be expected to shoulder all the costs. In DeFazio’s view, without a gas tax increase, the infrastructure plan is dead in the water. Rep. Sam Graves (R-MO) argued that raising the gas tax is simply not politically feasible.

Senate Democrats have unveiled their own $1 trillion infrastructure plan, which proposes to roll back some of the tax cuts enacted last year to help pay for investments in the country’s roads, waterways, broadband network, and transit systems. The top revenue-raisers in the plan include the following:

Committee hearings may be the only legislative action that infrastructure proponents will see in 2018. House Ways and Means Chairman Kevin Brady (R-TX) has no near-term plans to work on an infrastructure package. Brady wants to wait until there are actual pay-fors on the table, and he is leaving that task for the authorizing committees. So unless some serious financing options crop up soon, lawmakers are unlikely to move legislation this year.

Rep. Kristi Noem (R-SD) has been pushing to include an online sales tax measure in the forthcoming omnibus. Senate Finance Committee Ranking Member Ron Wyden (D-OR) has accused Republicans of “plotting to sneak a massive Internet tax increase into a completely unrelated federal spending bill.”

Rep. Noem’s bill, the Remote Transactions Parity Act or RTPA (H.R. 2193), would create sales and use tax collection obligations for remote sellers, with special carve outs for small sellers.

The Supreme Court is set to hear a case on taxing remote sellers in South Dakota v. Wayfair. For those who have not been following closely, the Wayfair case would allow the Supreme Court to revisit its 1992 decision in Quill Corp. v. North Dakota. In Quill, the Court held that the states may require retailers to collect use taxes only if it has a physical presence in that state.

Of course, in subsequent decisions, given the changing e-commerce landscape, the Supreme Court has hinted towards a change in opinion. In DMA v. Brohl, Justice Kennedy invited Congress to pass legislation on online sales taxes. Justice Kennedy wrote, “The Internet has caused far-reaching systemic and structural changes in the economy…a business may be present in a State in a meaningful way without that presence being physical in the traditional sense of the word.”

House Speaker Paul Ryan (R-WI) is gauging whether the RTPA has enough support for inclusion in the FY 2018 omnibus. This issue is not a partisan one — support depends on whether a given state levies a sales tax or not. Congressional Democrats have previously supported legislation like the RTPA. However, for members like Wyden, this bill is problematic since Oregon doesn’t have a sales tax.

As part of the 2017 Tax Act, Republicans enacted a controversial 1.14 percent excise tax on endowment returns. The tax is imposed on private universities with at least 500 students and $500,000 of assets per student. Last year, university presidents and other industry groups unsuccessfully rallied against the tax, noting that tax would not address the cost of college or student indebtedness.

In a March 7 letter to congressional leaders, universities recycled many of the same arguments in an attempt to persuade lawmakers that the endowment tax will not have the desired effect. University presidents noted that the endowment tax “will constrain the resources available to the very institutions that lead the nation in reducing, if not eliminating, the costs for low- and middle-income students, and will impede the efforts of other institutions striving to grow their endowments for this very purpose.”

In the letter, university presidents did not offer an alternative to the tax, though universities are currently working on a proposal that would provide them with a tax credit for the amount of grants and scholarships provided to students, allowing them to attend free of cost. Some in the GOP, like Rep. Tom Reed (R-NY), have indicated a willingness to work with these educational institutions to modify the endowment tax so that it only affects universities that do not spend enough of their endowment dollar on financial assistance.

Several hurdles lie ahead for the universities. For starters, the proposal hasn’t been scored, but it’s likely to cost over $1 billion. Universities also need a vehicle to attach their legislation to — top contenders are the FY 2018 omnibus and the FAA reauthorization bill. Additionally, Republicans will need support from Senate Democrats to move the endowment tax proposals.

The March 23 government-funding deadline is just around the corner. Lawmakers are scrambling to wrap up their work on the FY 2018 omnibus spending bill, which would fund the government for the rest of this fiscal year. House Majority Leader Kevin McCarthy (R-CA) has been pushing appropriators to get a bill out by March 14 to avoid the possibility of having to do another short-term continuing resolution.

Negotiations stalled last week due to the GOP’s attempt to drop a few family planning policy riders (e.g., defunding Planned Parenthood) into the $1.3 trillion spending package. Democrats are vehemently opposed to such poison-pill additions.

More than 100 riders are still under consideration according to House Minority Whip Steny Hoyer (D-MD). The omnibus is almost certain to include a fix for Sec. 199A. There may even be a short-term extension for the FAA — reauthorization is due on March 31. An updated version of the Retirement Enhancement and Savings Actor RESA (S.2526) and the Bipartisan HSA Improvement Act (H.R. 5138) are also in play for the final package. And whether there’s another one-year extension for extenders is anybody’s guess at this point – we’re not optimistic.

The House is aiming to release the text of the omnibus on March 14. The goal is to hold a floor vote on March 16.

Lawmakers are still trying to wrap up their work on the FY 2018 omnibus spending bill – the deadline is March 23. Progress has stalled due to the GOP’s attempt to insert a few family planning policy riders, such as defunding Planned Parenthood. Democrats are vehemently opposed to these poison-pill additions.

House Majority Leader Kevin McCarthy (R-CA) told lawmakers that they would need to introduce the omnibus legislation by March 14 to avoid the possibility of having to do another CR.

Here’s what else is in store for the week:

House

Votes. The chamber will take up consideration of the following tax and financial services bills:

H.R. 4263 – the Regulation A+ Improvement Actwould expand the Regulation A+ exemption and require the SEC to adjust the threshold for inflation every two years. The bill would also limit the registration and disclosure requirements for certain companies.

Financial Services Hearings. The House Financial Services Committee has scheduled a series of subcommittee hearings to examine issues related to cryptocurrency, SEC enforcement, and data security. See details in the activities section below.

Extenders Hearing. The House Ways and Means Subcommittee on Tax Policy will hold a Wednesday hearing on tax extenders.

Senate

Banking Bill. The chamber will resume consideration of Sen. Crapo’s regulatory relief bill for community banks (S. 2155). A cloture vote on the substitute amendment has been scheduled for 5:30 p.m. today At this writing, Republicans and Democrats have not reached an agreement on amendments (i.e., which amendments will actually get a vote.). By Friday’s count, 146 amendments have been filed.

Nomination Vote. The chamber will consider the nomination of Kevin K. McAleenan to be the commissioner of U.S. Protection at the Department of Homeland Security.

Key Hearings

Monday, 3/12

House Small Business Committee. A field hearing on “Disparities in Access to Capital: What the Federal Government Is Doing to Increase Support For Minority Owned Firms.”

Wednesday, 3/14

Joint Select Committee on Solvency of Multiemployer Pension Plans. The new joint select committee will hold an open session to organize the panel.

House Financial Services Committee. Subcommittee to hold a hearing on “Examining the Cryptocurrencies and ICO Markets.”

Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) have introduced an updated version of the Retirement Enhancement and Savings Act (RESA) – a bill to improve access to retirement savings.

The 2018 version of RESA (S. 2526) reflects the following changes from the 2016 bill (S. 3471):

Technical modification to ERISA fiduciary safe harbor for selection of lifetime income provider (section 204): The first sentence of the safe harbor is modified by replacing “selection of an insurer and a guaranteed retirement income contract” with “selection of an insurer for a guaranteed retirement income contract.” This one-word change clarifies that the safe harbor is solely for the selection of the insurer and the possibility that the insurer may not be able to make payments due under the contract.

Technical modification to benefits of the Tax Court: (1) modifies the survivor annuity benefit to remove deadwood reference to the United States Board of Tax Appeal (section 305 and sec. 7448(n) of the Code); and (2) conforms the legislative language for the deadline by which magistrate judges may elect Tax Court retirement benefits to the committee report for S. 3471 (section 307 and sec. 7448(b) of the Code).

Provisions deleted because of prior enactment: (1) extended rollover period for plan loan offsets (section 110 of S. 3471; enacted as part of Public Law 115-97); (2) modification of hardship withdrawal rules from 401(k) plans (section 111 of S. 3471; enacted as part of the Bipartisan Budget Act of 2018); (3) tax treatment of qualified equity grants (section 402 of S. 3471; enacted as part of Public Law 115-97); and (4) repeal of partnership technical terminations (section 506 of S. 3471; enacted as part of Public Law 115-97).

Modification of effective dates: RESA as originally introduced was generally effective for years beginning after December 31, 2016; these effective dates have been changed to years beginning after December 31, 2018. Additionally, the acceleration of PBGC premiums in section 506 has been modified by accelerating additional months of premiums.

Under the plan, Democrats would roll back some of the tax cuts enacted last year to help offset the $1 trillion price tag. For example, they propose to increase the corporate tax rate to 25 percent, return the top individual tax rate to 39.6 percent, eliminate the exemption increase for the estate tax, and end the preferential tax treatment of carried interest.

It remains to be seen whether Congress will immediately move to infrastructure after its work on the FY 2018 omnibus. Washington observers are generally pessimistic about the prospects of getting an infrastructure package done this year.

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